Dutch income tax in 2026: What internationals should know

If you live and work in the Netherlands, chances are you’ll receive a friendly-but-slightly-intimidating blue envelope inviting you to file your Dutch income tax return. For many internationals, this is the moment they discover that the Netherlands doesn’t have “one” income tax; it has three.

The three-box system: The foundation of Dutch income tax

For personal income tax, the Netherlands divides your taxable income into three “boxes”. Each box has its own rules, rates and deductions.

Box 1: Income from work and home

Salary, bonuses, benefits, pensions, and profit from self-employment all fall into Box 1, as well as the notional income from your main home (and mortgage interest deduction if you own that home). For the 2025 tax year, Box 1 is taxed at progressive rates with three brackets, meaning lower rates apply to initial income and higher rates to subsequent portions. 

Box 2: Substantial interest

This covers income from a “substantial interest” in a company; generally, when you (possibly with your partner) hold at least 5% of the shares in a private company (BV). From 2025, Box 2 uses a two-tier rate: a lower rate on the first portion of income and a higher rate on the remaining income. 

Box 3: Savings and investments

Box 3 is where savings, investments and certain second homes are taxed. Traditionally, this box does not tax your actual interest or investment return, but a deemed (notional) return on your net assets, taxed at a flat rate (36% for the 2025 tax year).

For internationals, all three boxes can come into play: salary and home in Box 1, shares in your own BV or your employer’s company in Box 2, and global savings and investments in Box 3. 

Resident vs non-resident: What are you taxed on? 

Whether you are taxed on worldwide income or mainly on Dutch source income depends on your fiscal residency status. In broad terms:

• If you live in the Netherlands and your social and economic life is centred here, you are usually treated as a resident taxpayer, taxed on worldwide income in the three boxes (with treaty relief to avoid double taxation where applicable).
• If you do not live in the Netherlands but have certain Dutch source income, for example, Dutch property or work performed in the Netherlands, you may be a non-resident taxpayer for those items. 

In practice, internationals often deal with tricky situations like:

• Moving to or from the Netherlands during the year (migration year / M form).
• Having a partner with income abroad.
• Owning assets in more than one country. 

These situations can affect what belongs in each box and which tax reliefs apply.

Box 3: Why the Dutch wealth tax is under pressure 

If you follow Dutch news, you will have seen Box 3 regularly make the headlines. The short version: the way Box 3 taxes savings and investments has been found to be unfair in many situations.

Historically, Box 3 assumed that everyone with assets above a tax-free threshold earns a certain standard percentage (a deemed return) on their assets, regardless of whether they actually did. When interest rates were very low and investment returns were volatile, many taxpayers paid tax on a fictional return that was higher than their actual returns.

In 2021, the Dutch Supreme Court (the so-called “Christmas judgment”) ruled that this could violate property rights and the prohibition on discrimination in cases where the deemed return exceeds the actual return. The government responded with a Legal Redress Act for earlier years, and a Box 3 Bridging Act from 2023 onward.

However, in June 2024, the Supreme Court ruled that even this “new” system can still be discriminatory when the deemed return exceeds the actual return. As a result, Box 3 remains in transition, and the tax authorities are working with notional returns plus the option to rebut in some cases, allowing taxpayers to show a lower actual return on their assets.

What this means for internationals

If you are an international with significant savings, investments, or a second home (inside or outside the Netherlands), Box 3 can have a substantial impact:

• Global savings and investments can become taxable in the Netherlands if you are a resident taxpayer.
• The rules are changing, and some taxpayers may later be entitled to corrections or reductions if their actual return is lower than the assumed one.
• If you have a tax partner, you can generally divide Box 3 assets between you for tax purposes, which gives planning opportunities. 

Because of the ongoing legal developments, Box 3 is one of the areas where many expats prefer professional guidance.

Get help with your 2025 income tax

Other expat-specific topics to watch

Expats should be aware of the following:

Migration years (arriving or leaving)

Your first and last year in the Netherlands are often the most complicated, tax-wise:

• Part of the year you may be treated as a non-resident, part as a resident.
• Income and assets before and after your move need to be allocated correctly.
• You may have to deal with a special M form instead of the normal return.

Getting the migration year right can have a big impact on Box 1, Box 2 and Box 3.

The 30% ruling and shares in your employer’s company

The 30% ruling is a well-known expat facility that allows qualifying employees to receive up to 30% of their salary tax-free for a limited period.

For some employees, especially those who hold shares or options in their employer’s company via a substantial interest, changes from 2025 can affect Box 2 taxation and require extra attention when filing. 

Tax partners

The Netherlands has its own definition of “fiscal partner” (tax partner), which doesn’t always match how you might think of a “partner” in everyday life. Having a tax partner influences:

• How certain deductions (like mortgage interest) are shared.
• How you divide Box 3 assets.
• Which allowances and credits you get. 

For internationals, it can be confusing to understand when you become tax partners and how to use that to your advantage.

Owning a home in the Netherlands

If you buy a home to live in yourself:

• The “eigenwoningforfait” (a notional income based on the WOZ value of your home) is taxed in Box 1.
• Mortgage interest may be deductible, subject to Dutch rules and caps. If you own property that is not your main home (e.g., a rental apartment), it is usually treated as a Box 3 asset. 

Self-employment and side businesses

If you are self-employed / ZZP or have a side business alongside employment: 

• Your business profit is taxed in Box 1.
• Depending on your situation, you may have access to specific entrepreneurial deductions, but these are being tightened over time. 

Self-employed individuals often benefit from professional support to correctly combine employment income, business profits, and Box 3 wealth in a single return.

Deadlines and practicalities for the 2025 tax return

For the 2025 tax year, the Dutch tax authorities generally:

• Open the online filing system on March 1, 2026.
• Set May 1, 2026, as the standard deadline for filing the return.
• Charge interest on tax due if your return (or a requested assessment) is not in on time.

You usually file your tax return digitally, in Dutch, via Mijn Belastingdienst or the app. If you receive an official invitation to file but do not file (or file too late), you risk fines, having to pay interest, and a lot of extra letters you probably don’t want to deal with.

It is possible to request an extension if you need more time, but it’s important to do this properly and in good time. 

What to prepare before you file

Whether you file yourself or ask someone to help, it’s useful to gather:

• Your BSN (citizen service number) and those of your tax partner/children.
• Annual salary statements (jaaropgaven) and any benefit overviews.
• Details of foreign income and tax paid abroad.
• Mortgage statements and WOZ value of your home, if you own one.
• Overview of savings and investments (in all countries), including balances on January 1.
• Information about shareholdings (Box 2), if you own part of a BV.
• Any relevant deductible expenses, like certain study costs or healthcare expenses, where applicable.

Having this information ready makes it much easier to check the pre-filled tax return and spot any missing items.

Should you do your taxes yourself or get help?

Many internationals can manage a straightforward return using the pre-filled online system, especially if:

• You only have a Dutch salary.
• You have no significant savings or investments.
• You are not self-employed.
• You did not move country during the year.

However, getting expert help is worth considering if:

• You have assets in more than one country (Box 3).
• You own shares in a company (Box 2) or run your own BV.
• You have self-employment / ZZP income.
• You’re dealing with migration years (arriving or leaving).
• You claim the 30% ruling or have equity in your employer.
• You simply prefer a fixed price and an English-speaking adviser who understands expat situations